Jane’s: First IAI-Boeing “Arrow 2” missile delivered to IAF

Israel will carry out an interception test of the missile this year.

The Israel Air Force (IAF) received the first “Arrow 2” anti-ballistic missile missile on October 31, reports “Jane’s Defence Weekly”. Israel Aircraft Industries Ltd. (IAI) is the chief contractor for the Arrow, and Boeing (NYSE:BA) is the subcontractor. Israel will carry out an interception test of the missile this year.

”Jane’s” received exclusive access to Boeing’s Arrow component assembly plant in Huntsville, Alabama, the home of the US aerospace industry in the US South. During the visit, correspondents saw only “some” Arrow missiles under production. Boeing and IAI declined to disclose the number of Arrow missiles scheduled for manufacture.

However, an Israel defense source told “Jane’s Defence Weekly” that IAI received deliveries of “several missile components” from Boeing on a weekly basis. Israel has two operational Arrow batteries, and reportedly needs 100 missiles for each battery.

Under a $78 million contract IAI and Boeing signed in March 2004, Boeing will supply 35% of the Arrow’s main components and subsystems, including the warhead’s electrical system, the radar shell (radome), missile casing, and electronic subsystems.

The contract came into effect in January 2005 and will expire at the end of 2006, unless the parties exercise options for additional joint production of the Arrow through the end of the second quarter of 2008. If all the options are exercised, the cumulative value of the contract will exceed $225 million.

IAI is responsible for integrating the Arrow’s systems and for final assembly at its MLM Division in Beer Yaakov.

“Jane’s Defence Weekly” said that IAI signed a strategic R&D contract with Boeing in 2002 in an attempt to ensure US administration support for production of the Arrow, and in the hope that a contract with Boeing would pave the way for obtaining US permission to export the Arrow to third countries.

Published by Globes [online], Israel business news - www.globes.co.il - on November 7, 2005